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tv   Closing Bell  CNBC  June 25, 2013 3:00pm-4:01pm EDT

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persuasive word you can use in a business meeting. yeah. >> and the most powerful words in business, though, clearly, there will be no meetings today. >> or you're fired. >> thanks for watching. >> "closing bell" is next. hi, everybody. we're into the final stretch. welcome to "closing bell." i'm maria bartiromo at the new york stock exchange. it could be another triple-digit day for the dow, bill. >> that would be 13 out of 17, i think, if memory serves. i'm bill griffeth at cnbc global headquarters. it's a long story, we'll tell you later why. f fasten the seatbelts. we're in the final hour of trading. yesterday at this time we almost made it all the way back from the sell-off, only to sell off again. but today, maria, that's not the case. we are up 123 -- 132 points.
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132 points at one time. and we're heading back in that direction again. >> we are indeed. 102 high for the dow. as we follow the markets, we're following the developing story, john corzine, former disgraced new jersey governor, may be facing a lawsuit from the government for his role in the collapse in the mf global and the disappearance of $1 billion in client money. now, people are asking why are these civil charges and not criminal? a full report coming up. and also, the big reveal. what is the best million-dollar home in america? if you've been watching cnbc all day, you've seen the various candidates. here are some on the monitor now. real estate powerhouse dolly lenz here with us. she'll tell us why it won and why it could affect the value of your home. stay tune for that later. let's check on where we stand as we approach the final hour for this tuesday. the dow jones industrials average um p again in the tripl
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digits. .75 higher as we see a major rebound for the averages. nasdaq, s&p 500, double-digit moves. nasdaq up 22 points, almost 1%, and s&p, 14 points, a similar chart pattern on the major averages. and to josh lipton we go for another big-move day here, josh. how does it feel? what are we doing going into the final hour here? >> bill, we're definitely in the green. the blue chips up 103 now. you hear two themes traders talk about. one is china. you had the liquidity fears gripping markets yesterday. now, china's central bank easing the worries of a credit crunch. and also, a lot of data this morning, clocked in better than expected. durable goods, consumer confidence. not surprising, what's working today, the cyclical sectors, the economic-sensitive sectors. the semis, and also the financials. the banks benefitting from a steepening yield curve and the economic data suggesting an improving economy. we are also watching the homebuilders.
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the home prices, best consensus, new home sales, better than expected. we were watching phm, kbh, which are expected to report on thursday. maria, back to you. >> thank you so much. stay with us as we break down the market here on the "closing bell exchange." josh, mark, keith fitzgerald, and our own rick santelli. good to see everybody. thank you for joining us. what do you think? are you getting whiplash after the markets? what do you want to do with a market up in the triple digits? >> we knew volatility was coming eventually. we saw commodities break down. that led into the bond market. what we were watching in the bond market was watching the yield on the 10 year and seeing if it would break through 2%, and then break through maybe 2.5%, which it did like it was cutting through soft butter. you know, we've actually seen now the stock market, following the bond market really for the first time. we're starting to see these things that have always been
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indicators do the right thing. but really, the interconnectedness of the global marketplace that's really been led by the central banks and their credit delivery. so what we want to see now is a little bit more volatility. we're going to see more volatility happening in the next, we figure, three to four months. we don't anticipate that slowing down at all. and we think that there's more risk in the market in places that we don't even see yet. so expect that probably, maria, for the summer. >> get ready for the volatility on friday, the russell rebalance. >> that's right. >> keith, what do you make of the volatility recently? is it because the rules are changing? >> i think there's some of that, but i think really what we've got a knee-jerk reaction in the traders, and they don't know whether to come or go. trying to figure out how bernanke will adjust, when he hasn't defined the term "adjust." is at the forefront of what they're doing. this is a market that was desperately needed a pullback. i think energy is exciting.
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i think the volatility will be our traveling companion for the next three, four, even five weeks. so get ready for that and use it as an opportunity. as long as bernanke is accommodative, generally the foot's on the gas. >> i wonder what everybody thinks about the idea that the fed does, in fact, start to pull back in september. i think over the last couple of days of this market digesting the economic data, digesting and parsing through what the federal reserve said, it's really no given that the fed, in fact, does begin to lower the bond-buying in september, given that the economic backdrop. >> well, i mean, wait a minute. the durable goods were good. new home sales were good. consumer confidence were good. kay schuller was good. >> but earning, the corporate sector has been the big part for a long time. bill, we're talking about flat revenue, neglect revenue for the quarter. sure, it goes higher, but not by much. >> you talk amongst yourselves, maria and i are going to talk. lennar had very strong earnings. housing stocks very strong. you know, it's going -- i guess
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you'll be -- >> what does the panel thing? >> mark, what do you think? >> i think the market now is essentially mixed up in this game of telephone where, you know, one kid tells the next kid who tells the next kid. and by the end of the day, you know, the message is nowhere near what it started off as. but my interpretation of what bernanke said last week, essentially, is that there -- they're not going to ease off the accelerator until economic growth is stronger. i really don't think that's going to happen until the beginning of 2014. and that's not a bad thing. i mean, we've come about as far as we can go getting high off of quantitative easing. it's about -- >> are you here -- is that my mike -- >> no, i think -- >> nobody can hear him. all right. rick santelli, a soft two-year note auction today. is that because the rules are changing? i keep asking that question right now, but is that what's going on? traders don't know what the rules are? >> you know, i think that it's more the fed watchers and the analysts and the economists that have the rules under duress.
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i do think the traders are starting to look at the markets the way they used to look at the markets -- whether bad or good. and i think a lot of defense being played by all of the issues we've discussed with china and the fed. you know, if you look at intraday, we were flirting with 260. if you look at the two-day, we couldn't get to the intraday highs yesterday, 265. but open the chart up, it will be a fresh high close, going back about 22, 23 months. >> right. >> what they talk about here is, stocks seem to be dealing with this. is this a one-off? are these higher rates going to do the same thing to stocks later on in this session? or tomorrow? that's the dynamic they're looking at. traders are loving at the move higher in interest rates, not only through the prism of the fed. >> i think, keith, you wanted to jump in there. >> well, i was going to say, i'm right on it with rick. there's a lot of adjustments to the trading men at. is it risk on or risk off? i think we saw people walk away on monday and tuesday. i was concerned we would see a
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cascade that wouldn't stop. but it came back on a lot of fronts today. that suggests to me that people are hungry, they're conscious of the pullback, and they're beginning to interpret the way they used to. there's some hunger for the market. that, to me, is a good thing, because it demonstrates the markets are working the way they're supposed to. risk is being bled out of the system and being replaced with capital as people find an appetite. >> meantime, josh lipton, i know as well as you do, the guys standing around you on the floor, licking their chops over the volatility. they love trading in this market, don't they in. >> yeah, that's right. and to echo some of the points the guests made. i hear some -- maybe near-term caution, because of some of the shiesh yous we've raised that traders will say you are entering a period here of change, of transition. the fed taper talk, the higher interest rates. i was talking to gmp's adrian miller before i came on. and said, listen, weeding off will be complicated, when, how,
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the pace, leaving the traders cautious in the near term, certainly expecting more volatility. >> what would you be doing ahead of the russell rebalance in the face of the uncertainty of the fed? you want to be owning stocks? >> absolutely. it will be incredibly volatile, but one example of it continuing is what happened with defensive stocks, right? telecom, staple the, took a nosedive, because everybody came out of the bond market. we'll see more of that. that means there will be times to choose and pick your spots. so i would stay with a close eye on this market, particularly into the close of this month. >> okay. mark, what are you doing here? >> right now, we're favoring cyclicals over defensives. so financials, technology, consumer finance. we're trying to stay away from sectors like utilities, you know, sectors that are, you know, going to be fluctuated by the higher interest rates. we're going to continue to buy stocks. we think the five-year prospects look fantastic. however, for the immediate term, we'll probably keep our cash on
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the sidelines. >> cash on the sidelines. there really isn't any alternative, right, other than cash. you keep it on the sidelines or you put it in stocks. >> you're either in or you're out. >> right. and you have to make sure it's the right set of cash, too. the dollar is the best-looking horse in the glue factory at the moment. you have to figure out, do i weigh -- >> all right. there he went again. folks, thank you for joining us. we have a few technical glitches going on today. thank you for being with us for your thoughts on today's market action. >> thanks, everybody. in the final stretch of trading for tuesday. about 50 minutes before the closing bell sounds. dow up 117. the high was close to 140. so we're reaching back toward that now. yahoo! shareholder meeting taking place today. let's just say there were interesting moments for ceo mari marisa maher's game plan. and we bring in the experts to help decide if yahoo! is a buy right now. and our next guest runs a $85 billion software company. he has harsh words for his
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competitors. s.a.p.'s bill mcdermott will join me live. >> that and much more coming up on "closing bell." clients are always learning more to make their money do more. (ann) to help me plan my next move, i take scottrade's free, in-branch seminars... plus, their live webinars. i use daily market commentary to improve my strategy. and my local scottrade office guides my learning every step of the way. because they know i don't trade like everybody. i trade like me. i'm with scottrade. (announcer) scottrade... ranked "highest in customer loyalty for brokerage and investment companies."
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welcome back. yahoo! is holding its annual shareholder meeting in california today. our jon fortt is there, along with a few shareholders who've been marching to a different beat during the q&a session. that happens a lot at shareholder meetings, doesn't it, jon? >> reporter: well, not quite this way, bill. i mean, say you're a new ceo, kind of high-profile. in a way, this meeting went as well as you could hope. the directors got voted in. they got the things voted down that they wanted voted down. the stock chart, stock up 3.5% for much of the day. then, there's this one shareholder during the meeting who starts a question, and then he says, "i'm greek, i'm a dirty old man, and you look attractive." yes, it was as awkward as it sounds. he went on to call her melissa and asked a question, i think, about working from home.
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mayer herself was also the focus of some walmart protesters. she's on the board there. they want her to do something about walmart firing some workers who were on strike. i talked to some other shareholders, though, who are pretty happy with the way the meeting turned out for yahoo!. take a listen. >> they've re-energized the company, the products, the demos that were done were really on target to show that. they're making changes, and they're going forward, and they're doing the right things. >> reporter: and so, all in all, a good day for them. but every once in a while, you get those odd ducks. dirty old men? i don't know. >> gadflies they call them, too, i guess. you're right. awkward. thank you, jon. >> one of those anyway. >> maria? >> shares of yahoo! up 3%, rebounding from a decline of better than 5% over the last
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month. is yahoo! a buy right now? we're talking numbers tonight. on the technical side is richard ross, global technical strategist with grayson. guys, good to see you. thank you for joining us. rich, kick it off. let's talk the charts. how are they looking to you of yahoo!? >> they're looking particularly strong. we would be a buyer of yahoo! right here. when we bring up this longer-term chart, you'll see it's really a tale of three breakouts, and we're a buyer of all three. let's take a look at that chart, and i'll show you. we start with a decisive breakout above the 200-week moving average, really for the first time in over seven years. we then emerge from a bullish ascending triangle when we take out that $19 level. and finally emerge from a symmetrical triangle or a coil. that's releasing all of the energy pent up over five, six, seven years of really doing nothing in the stock. now we've had a 14% pullback off
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the top with this broad market correction. i think that's exactly when you want to step in. this stock should trade $30. that's upside from here. i'm a buyer. >> steve, do you agree? >> no, i do not. sorry, rich. i think when i started studying yahoo! i sing the who, "we won't get fooled again," because over and over for the last 15 years, we've heard about the often predicted but never realized yahoo! turnaround. the fact of the matter is, although it's had an incredible rally for the last few months, it trades exactly where it did 15 years ago. the main reason for that, when it comes down to it, it's not about a ceo -- no matter how impressive she may be. it's about revenue. this company has ten straight years of year over year of declining of revenue growth. it's a dubious distinction. >> i think it's all about the ceo. we have a gravitas here of pedigree. look at stanley morgan.
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it's a breath of fresh air in a boy-dominated area. we have a bullish area here. i'm a buyer. >> i think the neighbor down the road google is doing everything right. that's a much better investment than yahoo!. >> do you like google, rich? do you like google as well? >> i love google. there's nothing not to like. there's plenty of room for yahoo! as well. keep in mind -- >> it's really a valuation call you're looking at. you're looking at valuation on the charts. >> it's a relative strength trade. google, that horse has left the barn. you're talking about a multibillion-dollar market cap. yahoo! has plenty of room for catch up, and they're doing everything they can to close that gap. >> all right. we'll leave it there. gentlemen, i guess that's what makes the market. we appreciate it. see you soon. we have 40 minutes before the closing bell sounds for the day on a market higher in the triple digits here. the dow up 111 points right now. nasdaq, s&p 500 also showing double-digit moves. just ahead, are car loans headed for a crash? the growing concern of the auto loan market that could prove
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welcome back. a gain of 115 on the dow. remember yesterday, maria, we were down 240 points at the low, came almost all the way back, a decline of 25 before the late-day sell-off. here we are up 116 points. i mean, this market really is looking for some clear direction, whether it's from the economy, from earnings, from the fed, whatever it's going to be, right? >> yeah, absolutely. today, making back up all of the loss from yesterday. >> s.a.p. one of the biggest makers of business software, we know that, plus expanding into other categories like the cloud. what does it mean for s.a.p. now that oracle and microsoft, of all companies, have teamed up, presenting formidable competition in that space? >> let's go straight to the source for an answer. joining us now is s.a.p. co-ceo big mcdermott. bill, wonderful to have you on the program. >> welcome back. >> thank you, maria and bill. >> does it feel like oracle is
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becoming a more formal competitor, not just software space, but with the cloud computing? >> i think they finally got the memo that customers want choice and you need an echo system of friendly partners to help collaborate with the customers so they get what they want. we built our entire strategy on an open echo system. that's why we have 15,000 partners. if we had to do a press release for every one of them, we'd have a lot of press releases. >> how will that change the landscape, them teaming up? >> it won't change the landscape one bit. the fact of the matter is the landscape is pretty much established. the big trends right now are going to be big data and how you can manage that for customers faster and better. it's going to be cloud comput g computing, both at the private and the public cloud level. and then you have to have applications that help industries run their businesses better so they can serve their customers. and we feel like we're very well positioned in that regard,
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because we always put the customer first. >> and you've been well positioned, already a leader in your field. let me ask you, bill. we all know europe is a mess. that's where the trouble in the world is, economically speaking. we know the u.s. is growing at an anemic pace, corporates everywhere are sitting on trillions of dollars in cash, unwilling to put it to work, whether in cloud computing, i.t., or putting new workers on the payroll. how would you characterize the environment right now? >> i think you hit it on the head, maria. big companies are sitting on a lot of cash, and they shouldn't be. this is the time they should be investing and investing for growth. i think the companies that get off the sideline and get in the game and invest in their consumers and enabling better relationships with their consumers, those are the companies that are going to win. they should be aggressive right now, both on the r&d and the m&a side, and they should go for growth. i think the capital markets want companies to grow. they want ceos to be bold again and make moves.
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and that's exactly what s.a.p. is intending to do. so i think it's pretty spotty. if you look at what you said about the u.s. and the slow growth, that's right. if you look at europe, it's getting better. it's still not great. >> it is getting better? >> it is better, yes, definitely better. >> what's better about it, bill? tell us what's better -- this is the first time i've heard this. i'd love to drill down more on it. what are you seeing in europe specifically? >> i'd be happy to. don't forget, we've had a double-digit growth business in europe, including through the crisis. so we have a pretty important brand position there. but companies are investing in the future in europe. as i look at the cloud, our cloud business in europe is growing in triple digits, bring means that consumers are either looking for fast solutions to buy things more efficiently, help their customers, or, in fact, manage their people, because the cloud is growing so quickly in europe. as i look at big data and our
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hana innovation, again, growing in triple digits. europe is doing more with less by applying technology, because they have to, or they're trying to get beyond the borders of just europe so they can grow outside of europe. >> yeah. >> you know, bill, the easiest word to utter in the corner office is "no," because the moment you say "yes," your job is on the line. if you take a risk and it doesn't work, you lose your job. you talked about companies that need to get off the dime and start taking a risk. what are you talking about? what do they need to do to get out there and start growing in a bigger way now, using the technology you're talking about? >> bill, you said it. i mean, they have to move from starting with "no" to starting with "yes." yes, we can. and basically get around their people and their business opportunities, and say, "yes." right now, they're all tied down in layers and layers of approvals, governance committees, and they're taking too long to make decisions, which is stagnating growth.
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>> do you blame central banks for that? >> no. i think it's -- you know, it's not just the central bank. i mean, the same case is true in the united states. i think that leaders have to have a bias for yes and a bias for growth. we have to trust our people again. trust is the ultimate human currency. unleash your people in the enterprise. >> yeah, no doubt about it, trust is all about everything -- in the markets or business. real quick, bill, what kind of a growth level might we expect from s.a.p. the rest of the year? >> well, obviously, maria, i can't comment too much, because we're in the quiet period of closing out this quarter. >> oh, go ahead and say "yes," bill. come on. >> well, i already did say "yes" when we -- here's what i said. >> what can you tell us, bill? >> just kidding. >> that's okay. i said we would grow the company 10% to 14%, in constant currencies at the beginning of the year, and reiterated that after the first quarter. which means you should expect s.a.p. to remain a market lea r leader, gaining share, and
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growing in double digits. that's what we're going to do. >> all right. good stuff, bill. thank you so much for joining us. we appreciate it. >> thank you, maria. thank you, bill. >> you bet. >> see you soon. good to see you. heading toward the close with a gain of 125 points. moving higher with 30 minutes left in the trading session. so we're starting to levitate again, here back to the highs of the day. we were up 132 points, maria. meanwhile, lax lending putting the homebuilding industry in hot water. now is the car loan industry following suit? that's next. and there's time to rev up the earnings season, but there are reports it's off track. stay tuned. [ male announcer ] i've seen incredible things.
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welcome back. stocks heading back to their highs. the dow is almost back to the high of a 132-point gain. jackie deangeles is tracking some of the movers. >> well, financials are a big leader as a group today. the second-best performing large-cap sector on the s&p. names we're watching like morgan stanley, goldman sachs, citi, bank of america. these are the ones that are leading the way. a couple of reasons for this. first, of course, the banks were getting hit on this latest sell-off, so investors are seeing some buying opportunity.
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but also expectations that the banks will profit from the higher interest rates that we're seeing, as well. meantime, i want to highlight pandora, also seeing a meaningful move to the upside, this after it said its online radio service has been incorporated into more than 100 different vehicle models, and it now estimates that one-third of all new cars sold in the u.s. this year will have pandora installed. also, carnival, fiscal second-quarter earnings rose and adjusted earnings beat expectations. that was on a gain from the sale of a up sh. the company also saying that it will split its chairman and chief executive roles. arison will remain the chairman. and watching the apple shares, pretty much flat. but perhaps more meaningful is the stock is hovering around the $400 mark. it just can't seem to break out. bill, back to you. >> kind of stuck right there. jackie, thank you very much. the california state teachers retirement system, better known as calsters, is the
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nation's largest pension fund, a $166 billion at work in today's market right now, maria. >> so with all of the market gyrations of late, we want to know what move the chief investment officer is making right now. he joins us now in an exclusive. good to have you on the program. >> welcome back. >> when you are talking about the amount of money that you are putting in the market, it's significant moves up or down in these days. how have you been handling this volatility? tell me some of the moves you've been making. >> a lot of tagamet and maalox. the volatility's returned since may 22nd. the portfolio was growing very steadily. now we're seeing a billion to $2 billion swings in the asset size, just due to the volatility of the markets. >> wow. >> we started taking on some profits in the equity portfolio, the usual adage, sale in may, go away. we started taking a little bit from the top. we didn't want to be underexposed. we did that for a little while in may, and now will ride at the
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policy target. >> is that your instinct to take profits even in a market that's up for today, as an example in. >> it's to rebalance. >> just to hit the target. >> well, you make a decision when you're on target, your target allocation, do you want to be overexposed to the market or underexposed? i always say it's like a giant cruise ship that we're sailing. subtle course corrections. we're worried about rough seas coming up at year end for us. >> chris, when you manage that much money, i know you have to keep it at a macro level on trends you're investing in. the big debate now on the interest rate fund -- the front, is how much higher interest rates will go as the fed begins talking about tapering. what's your sense of that, and what are you doing with your fixed-income investments? >> bill, we're very low in fixed income. we're at the bottom of our range, because we're worried about that. so we're fairly neutral duration at this point. in other words, the risk of the portfolio. but we're very prepared to move
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that risk way down. we think interest rates could still climb a little bit. i'm not going to disagree with bill gross who said this week he thought that it was time to go back into bonds. >> right. >> rates may moderate in here. we're certainly not back to a normal interest rate environment. we've got a long way to go before we get there. >> you have 12.5% in private equity. what are the alternatives you expose yourself to away from stocks? >> both of those are very large, mature portfolios. we're going to be a steady-state investor. real estate is a bifurcated market. there are some cities on the east coast, west coast, back to '07 price levels. that's a concern to me. >> you think they're getting away from you? they're -- >> well, we're going to take profits in some areas. and we're going to really focus in on core assets that are yield producing. steady rents, steady cash flow. we need that stability given the volatility in the rest of the portfolio. >> yeah. >> i noticed in the pie chart,
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54% global equity. i don't know -- take the u.s. out of that and take us overs s overseas. you know, we've noticed lately that the turmoil in markets like brazil, of course china, and now greece again. you know. you're seeing this tug of war that's going on in many countries, and the markets are suffering with all of the volatility. where are you finding opportunities right now? >> well, bill, the first thing is we actually have a home country bias. two-thirds of that global equity portfolio is still here in the united states. >> okay. >> we think it's the best market to be in. the one-third that's outside the u.s., we're still primarily in the develop markets, but the emerging markets are an increasing challenge. they're about 12% of the mcsi, the index which we follow, and they're likely to continue to grow. mcsi will add some of the countries to that index. you know greece is dropping down. so for us, there's a dedicated allocation for emerging markets, but we give our other managers the option to be back and forth in those markets.
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we're going to continue to watch them and that volatility issue. as you said, we know there will be gdp growth coming out of asia and some of the e.m. markets, but it's really -- you have to pick your times and pick your entry points. >> particularly now when you look at emerging markets, having seen all of the outflows. have you been hit with that given the outflows in the emerging markets, how exposed are you there? >> we're actually neutral to the emerging markets. we've really debated whether we should be overweight the emerging markets now, now that we're seeing the outflows. a good example is brazil. oh, my gosh. what a country with opportunity. >> right. >> but still, absolutely in a stalemate. you know brazil and rio will be the focus for the next four years with the world events there. it should be a great opportunity. it's so hard to figure out how to make money in those markets. >> would you be poised to put money in the emerging markets, brazil included, after the huge outflows we've seen? >> slowly. as you know, we're a long-term investor, so we're going to move slowly in. we want to maintain at least a market weight in the emerging
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markets and maybe move that up a little bit as -- if we continue to see them sell off. certainly, europe is a real struggle in terms of their economy. the markets have done very well this year, surprisingly well. and we would think that they would slow down. asia, you know, japan, the flow money in and out of japan has been crazy. it's hard to be a long-term investor in those markets. you see the growth in e.m., and that's where we think we could put money to work and get return. >> would you buy japan after the outflows? >> that's tough to say. i would say abe-nomics has been an experiment. i was an investor in japan in the '80s when it was hot, but for two decades it's been a flat market. i met japanese investors a while ago. they were challenging me, aren't you bullish on japan, and i still had to say i'm not sure. >> a tough answer to give, isn't it? >> it really is a challenge.
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>> thank you, chris. >> good to talk with you. >> great to see you again. 20 minutes left in the trading day, and we are setting highs for the session right now, maria. yesterday, it was a 240-point decline at the low of the day. now we're up 138 points. >> yeah, driving up in a nice new car is the dream of many, but the loans behind those dreams could be creating a nightmare that could be eerily similar to the mortgage crisis. we'll look at that next. then, after the bell, cnbc has been asking you all day which million-dollar summer home you think is the best right now. real estate superstar dolly lenz will be joining maria with the big winner. [ female announcer ] there's one thing
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welcome back. a pretty good rebound today, nicely, after yesterday's tumult. josh lipton has been tracking the moves. over to you, josh. >> the dow marching higher into the close. the blue chips up 139 right now. two reasons. listen, easing worries about chinese liquidity. also, all of the economic data we got this morning, clocking in better than expected. durable goods, richmond fed, consumer confidence. the benchmark gauge, what's really working, the financials. it's citi, it's bach, jpmorgan,
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steepening yield curve, and all of the data suggesting an improving economy. we're watching the homebuilders today. home prices better than expected. new home sales best consensus names. phm, hov, spf, kbh, which reports on thursday, and finally, we'll touch on a pocket of strength. that would be the autos. ford is higher today, up about 15% so far this year. also gm is higher, up about 11% so far in 2013. maria, back to you. >> all right, thank you, josh. bill? and we've lived through the subprime mortgage crisis, right? now, there's fear we could be driving into a similar situation with car and truck loans. phil has that story. >> this is because we're seeing an increase in the number of subprime auto loans being written, and we've seen it as the economy has expanded. and the latest report from trans union showing tdelinquency rate is rising.
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in part because of the borrowers not paying their bills within 60 days. 5.5% are at least 60 days past due. look at the overall past due delinquency rate. it's up only fractionally, still fewer than 1%. the average balance is rising with car prices. that's been going on for the last couple of years. in the first quarter, according to transunion, the auto loan balances topped $13,000. a year ago, it was under $13,000. look at the shares of all of the auto dealers' stocks, because these guys have had an interesting year. a big ramp up last year, but for this year, for the most part, generally holding in check with some slight gains for automake and a few of the other dealer stocks. that's something we'll watch closely as auto sales move higher, what's happening when it comes to subprime loans. back to you. >> thank you so much, phil. we're in the final stretch. 15 minutes before the closing bell sounds. we're very close to coming back
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from all of the losses yesterday. we were down 139 yesterday. check it out, a gain of 124 right now. inching closer to the highs of the day. >> any word on the bias one way or the other on the close? >> art, what are you hearing? what are you hearing, art? for sale, about $300 million for sale. so a bias to the sell side right here. >> small again. >> ubs coming over. >> there he goes. >> and there he went. slight bias to the sell side. i don't think he was expecting me to engage him. >> he can handle it, i know. >> he can. >> after the break, we'll talk with two market pros still finding a lot of buying opportunities despite all of the uncertainty. and that and more coming up on "closing bell," where you never know what will happen. stay with us. we went out and asked people a simple question: how old is the oldest person you've known? we gave people a sticker and had them show us. we learned a lot of us have known someone who's lived well into their 90s. and that's a great thing. but even though we're living longer,
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a lot of green in the markets today, as we are only 10 minutes away from the closing bell. anything can happen. it's already happened today. joining us with a breakdown there, jeff from fifth third bank and brian singer from william blair. hopefully, maria bartiromo is there. >> i am right here. thanks very much for joining us. bill and i were just talking about how this market has been so schizophrenic. yesterday, we were down 139
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points, and here we are up 118. how do you see it? what do you think this is telling us? >> this is an adjustment period. we're used to a free pass from the fed. it now has to pull back, reassess and find new levels. we think it's up from here. >> up from here. do you agree with that? >> the u.s. is fairly priced at this point. the market has been hit by a number of things all at once. it's been hit by the fed's use of the word taper. it's been hit by fears in the emerging markets and pullback from abe-nomics. >> but the question, what are you doing? >> we're neutral on the u.s., neutral on japan and long on europe. >> long on europe. why? >> the market has priced in a significant amount of risk. the key for us is to stay out of the low-risk assets and take selective opportunities in riskier assets. and now we see the greatest opportunities -- not without risk -- but the greatest opportunities -- >> you don't think the u.s. is pricing in risk right now?
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>> it's priced at about fair value, so i think it could be priced a lot lower if they wanted to price in risk. >> it's interesting that you say you're buying europe, because we just had on the head of s.a.p., bill mcdermott, who said europe is getting better. is that what you see? do you think they're still selling everything because of the worries over the debt crisis, and, in fact, the underlying fundamentals are improving? >> the unit labor costs have gone down in spain. they registered a trade surplus, exporting. they're beginning to get competitive. it's not nirvana yet. >> jeff -- >> -- reap the benefits of the housing market, the manufacturing, and especially energy. >> go ahead, bill. >> no, i was going to say. you expect an acceleration in our economy in the second half of this year? >> i can't pick up bill, i'm afraid. >> you're not hearing bill. >> i would say that it's likely to be the case that we just continue with the slow volatile growth period that creates sometimes fears of weak growth
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and sometimes optimism with stronger growth. >> but we can't ignore what we heard last week, over the last two weeks by the federal reserve, right? do you think once the fed begins lowering the amount of bonds that it buys every month, that there is a reason not to own stocks, that there's a reason to move my money into fixed income? and will this be a disruption for the market? it already has! >> if the fed had said the problem was inflation, and they were pulling back for that reason, one thing. they're not talking inflation. they're talking about an improving economy. that's a different picture for investors with different implications. >> it's what you say a lot, bill, this is good news. >> yeah, maria, apparently jeff can't hear me. >> i can now, bill, thank you. >> okay. if the fed is talking taper and the bond market really takes it to heart sooner rather than later and rates rise enough, doesn't that put a crimp on the economic growth that you see in the second half? >> less than one would think. we think the fed has done a great job in bringing down borrowing costs and allowing refinancing. that refinancing is already gone
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on. the consumer will continue to benefit from that. and the economy's much less dependent on quantitative easing that it was at one point in time. >> you think it's appropriate the fed lowers the bond buying the end of year, and do you think that will happen? are you expecting the taper in september? >> we actually thought it might begin later. we thought it's not a bad time, because with the federal budget deficit coming down, it's a great time for them to -- they have to get to that point sooner or later, why not get to it when bond issuance is going down? >> in terms of groups in the u.s. where do you want to be long if you're right? >> since we're expecting growth in acceleration, the generals, like the energy, we think it has great benefit for the transports, select regional banks, some of the other financials. >> can you give us one idea, something you like in europe? >> something i like in europe? >> yeah. >> short german bonds and long italian and spanish equities. >> okay. >> wow. >> thank you very much, gentlemen. we got real specifics here.
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>> get brian back here. provocative. there he is. >> brian, jeff, thank you very much. appreciate your time today. >> take a break and come back with the closing countdown for another volatile day here. and then after the bell, a new low for john corzine to report. the co-chairman and the new jersey senator and governor, he now is facing new legal troubles. we'll tell you who is after him now. you're watching the "closing bell" on cnbc, first in business worldwide. ♪ ♪ [ male announcer ] if you can't stand the heat, get off the test track. get the mercedes-benz you've been burning for at the summer event, going on now at your authorized mercedes-benz dealer. hurry, before this opportunity cools off. goieverybody has differentrized ideas, goals, appetite for risk. you can't say 'one size fits all'.
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about three and a half minutes left. before i forget, the reason i'm at headquarters today, filling in for tyler on the nightly business report on pbs with my dear friend susie. hope you can join us. check the local listings, and we'll see you tonight on nbr. >> in new york, it's 6:30, right, bill? >> i believe so. mike? yes, i think it is. how about a five-day chart of the dow? what do you think? let's relive some of the volatility -- >> you want to relive this? okay. >> i mean, one day we're down 100 points, next day up 100 points, and today up 116 after the big sell-off yesterday. part of the reason is the uncertainty about the future of interest rates. i don't think anybody, including the fed, expected the rise in yields along the long end of the curve. if we look at a five-day chart of the 10-year yield, that rise sort of mirrors the opposite of what the dow has done here, don't you think, maria? >> absolutely. and as this yield rises, it
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seems to cause nervousness on the part of investors. so joining us right now on the floor is terry dolan from benjamin & gerald brokerage. good to see you. >> thank you. >> what a wild week, and it's only tuesday. what do you make of the move? >> the move yesterday morning, that's the move we saw, and it rallied through the day and fizzled. today, we did too much too soon on the correction. let's take a little bit -- let's take more of a second look. having that said, i think as you and i discussed last week, we're creating a trading range, maybe 500 to 800-point trading range. we need to do more work in the mid to lower end of the range, and frankly, i think we could see lower levels in the market. >> lower levels before the buy on the dip comes back. >> before we continue higher. i really believe we'll continue higher. i believe the trend is intact. we needed a healthy pullback. as far as interest rates are concerned, my view, the fed got what they wanted. they mentioned tapering, through
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their jawboning effort, they got the rates to come up on their own. >> you wanted 2.63 on the 10-year? >> i don't think they wanted the spike, but they wanted to prove -- two things took place here. number one, a re-education for the fact that interest rates are determined by the supply and demand alone of the fund, period. not some mark that the fed puts down on a book. that's the first thing. the other thing is that you saw fringes of the bond market that had lack of liquidity, another wake-up call for the investor who thinks they might be able to get out at a nominal rate or you'll. >> where are you seeing the conviction in the market? when you go around and see the customers, and you see the prices going higher, is there any conviction in any of the sectors that you can tell us? >> we saw the rotation going on right now where we got out of some of the larger caps and the more secure stocks and moving quicker into a little bit more of the underfavored plays, like, you know -- i think some of the areas that are still undervalued are probably biotech and some of the tech values are fading. bear in mind, i'm not saying the
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market is going down. i think the market as a whole is very positive in that i would find value in all elements of the market today. >> bill, i'm going to run back for the next hour. i'll see you tomorrow on the 4:00. >> you got it, maria. terry, you're getting a market you can trade here. >> right. >> and so far -- so far -- the markets have held at their support levels. do you find that encouraging? >> i do. actually, according to some of the minor work i did, 14-6 was the first stop for me. yeah, i find that to be exactly right. it's a question of how it performs right in here. now, to the extent it was a real technical point, it was really an intermediary point, or small, technical point. it was built over a long term -- >> so you're waiting for, what? a washout of some kind to tell you to get back into this market? >> not so much as a washout. i would be telling my investors to start buying somewhere in here on the way down. and not to think the market's going to turn around and go straight up. but to start to accumulate positions, especially if they miss the move initially and now
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we have a nice decent retracement. >> got it. thanks, terry. that'll do it for the first hour of the "closing bell." we're going off the highs of the day with a gain of about 103, 105 points on the dow jones industrials average. stay tuned. the second hour of "closing bell" with maria bartiromo. i'll see you tomorrow. and it is 4:00 on wall street. do you know where your money is? hi, everybody. welcome back to the "closing bell." i'm maria bartiromo on the floor of the new york stock exchange. the stocks clawed their way back from yesterday's losses, although we did have about $500 million for sale at the close, so we are ending off the best levels. look at how we're settling out on this tuesday afternoon with the dow up 101 points. about .66%. the s&p 500 also off of the best levels of the afternoon, but nonetheless, double-digit move. 15 points higher on the nasdaq composite. high about 27 points.
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